The Bahamas Securities Commission revealed on Thursday that it had mandated the transfer of FTX’s cryptocurrency holdings to government-controlled wallets on the preceding Saturday.
The commission stated in a press release that it issued the order by the law, which enables it to act if necessary to protect clients or their cryptocurrency funds.
FTX Bankruptcy Leads To It Being Protected By The Commission
By an order issued by the Supreme Court of The Bahamas, the Securities Commission of The Bahamas (the “Commission”), acting in the course of its regulatory duties, “took the action of directing the transfer of all digital assets of Digital Markets Ltd. (the “FDM”) to a digital wallet controlled by the Commission, for safekeeping,” according to a press release. The interests of FDM’s clients and creditors were to be protected, and prompt interim regulatory action was required.
Why the commission made the notification five days after issuing the order is unknown. Additionally, it’s unclear if and when exactly these Cryptocurrency transactions may have happened.
On Friday, Nov. 11, they declared bankruptcy in a disorganized filing that incorrectly listed other businesses that are not a part of them, as also declaring bankruptcy. The company looked to have been hacked on the evening of November 11 and into the early hours of November 12, when hundreds of millions of dollars worth of cryptocurrency started to flow out of FTX’s wallets. Some of these transactions were related to foul remarks made about the former FTX CEO Sam Bankman-Fried.
Ryne Miller, the general counsel for FTX US, initially tweeted that he was looking into the matter before later revealing that FTX was attempting to move some cash to a cold storage wallet
The revelation might also be a foreshadowing of a legal dispute between the United States and the Bahamas, where FTX has its headquarters. “It is not the knowledge of the Commission that FDM is a party to the US Chapter 11 Bankruptcy proceedings,” the SCB statement read.
